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The agreement announced last week means that the auction house will make an unspecified financial contribution to allow the new Saatchi Gallery to offer free admission when it reopens in early 2008 at new premises on the King's Road, Chelsea in the Duke of York's HQ.

In return, Phillips de Pury hope that their status as official partners of one of the most famous names in contemporary art will further raise their profile.

The agreement also implies that Charles Saatchi is likely to sell through Phillips whereas previously he has sold through Christie's - including the 130 works from his collection sold in a single sale at Christie's in December 1998.

"I have tremendous admiration for Phillips de Pury because of their single-minded commitment to contemporary art," said Mr Saatchi. "I am certain that over the coming years we will see them grow into the major force in this area."

When ATG quizzed The Saatchi Gallery over the matter of future consignments, a spokeswoman said: "Although that is not part of the deal of the partnership, by making this important contribution Phillips de Pury would naturally expect us to show them some loyalty in return."

The new Saatchi Gallery will have 70,000 square feet of exhibition space, making it one of the largest contemporary art museums in the world. It is estimated that attendance will grow from 600,000 to over one million visitors a year. The old gallery in the former County Hall in London closed two years ago after a dispute with the Japanese landlords.

The first show at the new gallery will be an exhibition of Chinese contemporary art from The Saatchi Gallery collection. Phillips de Pury will also be focusing on this area when they offer the Farber collection of Chinese avant-garde art at their permanent and refurbished London saleroom in Howick Place on October 13.

The partnership also means that The Saatchi Gallery and Phillips de Pury websites will link to provide a new platform for both artists and buyers. The Saatchi Gallery currently have 60,000 artists and art students displaying their art online via their 'Your Gallery' site (which they say receives 40 million hits a day) and Phillips de Pury have recently launched www.phillipsartexpert.com, which offers an interactive guideline for art collectors to navigate the contemporary art market.

Simon de Pury, chairman of Phillips de Pury, said: "We have long been an admirer of The Saatchi Gallery, which has played a leading role as a tastemaker in the contemporary art world for a large number of years.

"We strongly believe that in addition to a commercial vocation we have a cultural vocation and we are thrilled that through our partnership, a very wide public will have free access to the exhibitions at the Saatchi Gallery."

By Alex Capon